Xiaomo's revenue and profit forecast for ZTE (00763) for this year will increase 5% and 10% year over year.
The Zhitong Finance App learned that Xiaomo released a research report stating that it gave ZTE (00763) an “increase in weight” rating and predicted a year-on-year increase of 5% and 10% year-on-year revenue and profit to reach 130.7 billion yuan and 103 billion yuan, with a target price of HK$13.
According to the report, the company's performance in the first quarter was mixed, and revenue growth was steady. Although the network business of Chinese operators was weak, the steady performance of the government, enterprise and consumer business made up for related losses. Gross margin declined, and net profit growth slowed sharply.
The bank believes that despite the weak financial trend of ZTE, revenue and profit for the first quarter were 4% and 5% higher than expected, and it is estimated that there will be a positive reaction to the stock price. However, unless ZTE's business growth accelerates significantly in the next few quarters, it's not expected that ZTE will continue to receive critical reviews.